Chapter 2

Contracting Parties: Roles, Responsibilities, Authority

Contents

I. Structure and Responsibilities of Primary Department Contracting Units

A. Office of Contract Policy & Management (OCPM)

B. Contract Administration Managers

C. Office of Finance (Rate Setting)

D. Office of Legal and Regulatory Liaison (OLRL)

II. Structure and Responsibilities of Departmental Component Contracting Units

A. Responsibilities

B. Roles

III. Other Departmental Offices with Contract Related Responsibilities

A. Rationale

B. Signatories

IV. Relationships Between Central Office Units and Departmental Component Units

A. Differences Across Departmental Components

B. Common Goals

C. Proper Protocol

D. Technical Assistance

E. Resources Available

V. Optional Application Activity - What should I do?

Learning Objectives

After reading this chapter, you will be able to:

  • Correctly identify the responsibilities of the Office of Contract Policy and Management.
  • Correctly identify the roles and responsibilities to be filled in Departmental Component Contracting Units.
  • Explain the proper protocol with regard to decision making as it pertains to Department-Departmental Component policies and relationships.

Primary Department Contracting Units

Primary responsibility for third party contracting within the Department falls upon the Department’s Contract Administration Managers in each Departmental Component and the following three offices:

  • the Office of Contract Policy and Management (OCPM);
  • the Office of Finance; and
  • the Office of Legal and Regulatory Liaison (OLRL).

Office of Contract Policy & Management (OCPM)

The Office of Contract Policy and Management (OCPM) is placed organizationally under the Assistant Commissioner of Budget, Finance and Administration, Real Estate and Information Technology. It is the principal office responsible for oversight ofthird party contracting practices and policies throughout the Department. Drawing its authority from Administrative Order 6:20, the OCPM develops and promulgates department contracting policies and procedures, evaluates and monitors current contracting systems and practices, and if necessary, recommends revisions to appropriate organizational authorities.

Two Department publications, the CONTRACT POLICY AND INFORMATION MANUAL (CPIM), and the CONTRACT REIMBURSEMENT MANUAL (CRM), are produced by OCPM to communicate acceptable contracting policy and practices and support consistency, where applicable, across Departmental Components.

Additional responsibilities of the OCPM include:

  • developing, reviewing, revising and approving all standardized contracting documents and forms in use in the Department;
  • monitoring contracting unit implementation of contract policies and procedures;
  • recommending and coordinating new system revisions and contracting initiatives in Department contracting;
  • reviewing and approving policies and procedures specific to DHS Departmental Component contracting units;
  • designing and monitoring procedures associated with special Department contracting operations;
  • providing technical assistance to coordinate and administer Interdepartmental and Intradepartmental Agreements;
  • providing technical assistance to consolidate multiple provider funded contracts when contracts cross Departmental Component or Department lines;
  • functioning as liaison for the distribution of information regarding contracts among providers, contracting units and Department offices;
  • ensuring the availability of Department-wide contract information; and
  • Coordinatingand providing technical assistance in training programs on contract-related issues.

Contract Administration Managers (CAM)

The Contract Administration Managers (CAM) are representatives from all of the different DHS Departmental Components that meet on a regular basis to discuss contracting issues.

The managers use the CAM meeting forum to keep the contracting units within the Department abreast of changes in Department contracting policy and related issues. During the meetings, representatives will discuss common emerging contracting problems and any statutory or legal changes that impact on contracting practices. They may then propose initiatives to ameliorate contracting conflicts, and design strategies for solving contracting related problems.

Office of Finance (Rate setting)

The Office of Finance was formerly known as the Office of Cost Reimbursement. It was established by Administrative Order 6:20 in order to play a role in developing contract-based rates. The Office annually reviews cost reimbursement expenditure reports and sets rates based on actual costs.

It also develops Medicaid rates for the DDD Community Care Waiver program based on Waiver categories. Some examples of rate setting categories are:

  • Personal care for DDD clients, such as supervisory care;
  • Habilitation, and the cost of running adult training centers; and
  • Case Management.

Office of Legal and Regulatory Liaison (OLRL)

Established by Administrative Order 1.25, the Office of Legal and Regulatory Liaison provides guidance regarding legal matters (consistent with Executive Order #6, Role of the Attorney General, effective March 14, 1990) including, but not limited to, the following:

  • federal and state legislation and regulations, in conjunction with department and departmental component legislative liaisons and administrative officers;
  • federal and state judicial, administrative and hearing decisions;
  • federal and state litigation (civil, criminal and administrative hearings) except as noted in A.O.1.25 section iii.a1 with regard to DYFS;
  • Office of the Attorney General opinions and advice (both formal and informal);
  • department of human services’ central office and department component level statements of policy and procedure in the form of regulations, administrative orders, policy circulars, bulletins and manuals;
  • governor’s office statements of policy and procedure in the form of executive orders and other directives;
  • executive branch departments’ and other government, public and private agency’s statements of policy and procedure; and
  • department of human services’ contracting and interagency interdepartmental agreements.

Departmental Component Contracting Units: Responsibilities and Roles

Responsibilities

There are 12 contracting departmental components in DHS. Departmental Component contracting units are responsible for the direct operations of contracting within the scope of their particular contracting component. These units will:

  • oversee the negotiation, execution, payment, and modification of contracts;
  • monitor the fiscal and programmatic aspects of contracts;
  • supervise operations and providers to ensure compliance with department policies, procedures, and standards;
  • participate in contracting policies and procedures specific to the departmental component contracting units, (and issue such policies and procedures only with OCPM approval);
  • issue Departmental contracting policies and procedures promulgated through the OCPM;
  • provide technical assistance to providers in contracting related issues; and
  • provide training to field staff and providers in contract-related matters.

Roles by Job Title

Contract Administrator: Individuals in the Contract Administrator title series review and administerDepartmental Componentthird-party contracts and provide technical assistance in the areas of contract preparation, control, monitoring, amendment and closeout, audit compliance, and service evaluation. They conduct field visits and review reports to ensure compliance with contract terms and conditions, and Department contracting policies and procedures. In their role, they are charged with promoting standardization, administrative and cost efficiency, accountability, and integrity in the contracting process and in the delivery of purchased services.

(For a complete list of examples of work see excerpts fromthe Department of Personnel Job Specifications for Supervising Contract Administrator, Contract Administrator I, and Contract Administrator II at the end of this Chapter.)

Program Analyst/Coordinator: Program Analysts gather information and evaluate the effectiveness of current or projected operating programs. They provide information and advice to management, and may participate in setting program goals and objectives and in developing program related procedures.

Program Coordinators provide technical support to professional staff concerning the details involved in contract preparation and monitoring; and to local community agencies and organizations in the implementation of contracted programs and services.

(For a complete list of examples of work see excerpts from the DOP Job Specifications for Program Development Specialist I, Program Analyst and Program Coordinator at the end of this Chapter.)

Other Departmental Offices with Contract Related Responsibilities

Other Offices in the Department, which are not contracting units, have contract-related responsibilities. These offices include, but are not limited to:

  • the Commissioner’s Office;
  • the Division Directors’ Offices;
  • the Office of Auditing;
  • the Office of Federal Fiscal Coordination; and
  • the Office of Budget Planning.

Rationale

The Commissioner and Division Assistant Commissioners’/Directors’ Offices are a unique part of the contracting process, in that they are responsible for the contract signatures. There are a number of reasons why the Commissioner or other high level administrators within the Department are designated to sign off on contracts, but primarily, they are ultimately accountable for the operation of their respective areas. Furthermore, the process of having high level administrators sign the contract other than the individuals who negotiate and monitor the contracts provides a system of checks and balances against fraud and misappropriation of funds.

Signatories Chain of Command

Policy Circular S1.03 - Authorization to Sign Contract Documents says the followingabout the authorization to sign contracts:

1. In accordance with N.J.S.A. 30:1 et seq., the Commissioner has the authority to sign contracts for the Department and can formally designate primary signatories to sign Contracts on his/her behalf. Such designation shall be in writing by name, title, and by unit or region if applicable, and shall include all contracts signed by the Departmental Components including those in Central Office.

2. The Commissioner has designated the Assistant Commissioners’/Division Directors as having the primary signatory authority to sign Contracts for their respective Divisions. In the Division of Youth and Family Services, the Regional Administrators are designated as the primary signatories for their respective regions.

3. Each primary signatory may authorize signatories to sign contracts on his/her behalf or in his/her absence as indicated on the signature Authorization for DHS Contracts form.

4. Contracts signed by persons other than those indicated on the Signature Authorization for DHS Contracts form shall be considered invalid.

5. Any changes to the form, whether for the primary signatory or additional signatories, must be timely, in writing and filed with OCPM. The entire form must be completed anew whenever the signatory designation changes. The new form will update the prior form(s) on file. Prior forms shall be maintained for audit purposes.

Relationships between Central Office Units and Departmental Component Units

Differences across Departmental Components

Many of the contracting differences across Departmental Components are the result of the historical development of the individual Departmental Components, the clients served, and the community resources available.

Common Goals

The Departmental Components work together and with the Department by following the guidelines and policies enumerated within the Contract Policy and Information Manual and the Contract Reimbursement Manual.

Proper Protocol for Decision Making

It is important for all staff, at both the Department and Departmental Component levels, to work together in providing quality services to the Department’s clients. Whenever an issue transcends the purview of a particular office or unit, an effort should be made to contact other potentially involved Departmental Components so that a consistent approach and solution can be determined that meets the needs of all of the impacted Departmental Components.

The Offices of Contract Policy and Management and Legal and Regulatory Liaison want all Departmental Components to seek legal and contracting technical assistance when questions or problems arise, or for advice on how to proceed when unusual or controversial issues are present. Examples of unusual or controversial issues would be terminating a contract, or State employees petitioning through an RFP (Request for Proposal) to be able to provide services to the Department’s clients.

If broader technical assistance or information is required, the Department has a long history with OMB/Treasury, the Attorney General’s Office, and other state departments, which can provide assistance and guidance on selected topics.

In short, the following tips for following proper protocol are advised:

  • work within Departmental Component authority;
  • stay within the policies and chain of command;
  • make use of available technical assistance; and
  • make use of resources outside the Department.


Scenario #1

Proper Protocol for Decision Making

General Problem

The Department will only pay for those legitimate administrative costs that can be allocated to a specific Department program or service. It will not pay for G&A (General and Administrative) costs of other organizations or individuals. Occasionally a provider may propose that these costs be absorbed by a Departmental Component.

Specific Problem

A provider agency contracts with two different Departmental Components. The first Departmental Component has a program that utilizes Federal funding that stipulates in the program description that the federal government will not pay for any administrative costs, it will pay for program costs only. The provider agency for a given period of time has been passing the administrative cost for this program to the second Departmental Component. The second Departmental Component through a review of the Annex B Summary of Expenses has just become aware of this practice.

What should the two Departmental Components do?

What action, if any, should be taken with the provider?

Recommended Solution to Scenario #1

Proper Protocol for Decision Making

  • The involved Departmental Components should meet to discuss the problem and dynamics of the issue and develop a mutually agreeable strategy to ameliorate the situation.
  • If a negotiated agreement can not be worked out between the involved Departmental Components the issue should be forwarded to the Office of Contract Policy and Management so that they can be apprised of the problem and be allowed to assist in arranging an acceptable solution between and among the participating Departmental Components.
  • If necessary the Department's Office of Auditing can be contacted to do a special G&A audit of the contract to assist in determining the appropriate funding revisions, transfers, etc. between the involved Departmental Components.
  • The Federal program should bear its fair share of the G&A cost to the provider. However, if the Federal Government still refuses to participate in the G&A cost, the provider should make a decision regarding its continuing in the program. If the provider agency wishes to continue in the program; then, they will have to supply the G&A expense from its own funding sources (endowments, fundraising, fees, etc.).

Scenario #2

Working With Department/Departmental Component Authorities

General Problem

As a contract administrator assigned to a Departmental Component you may receive correspondence that requests that a provider agency be allowed to initiate a practice that is counter to a contracting policy of the Department, or an “exception.”

Specific Problem

You receive a letter from a faith-based organization that contracts with your Departmental Component. The organization states that although it wishes to comply with all of the Department's contracting policies, it can not on moral grounds comply with all of the State's Affirmative Action regulations as stipulated in the Department's Standard Language Document (SLD). Specifically, the section of the SLD that prohibits discrimination regarding affectional sexual orientation between two consenting adults of the same gender.

How would you handle this situation? What should you do?

Recommended Solution to Scenario #2

Working With Department/Departmental Component Authorities

Recommended Solution

  • First, the contract administrator should discuss it with his/her immediate Departmental Component supervisor, and eventually, if needed, refer the issue to the Office of Contract Policy & Management or the Office of Legal and Regulatory Liaison (legal) staff to obtain the appropriate reviews and answer.
  • This issue (changing the SLD) has a long history, and the basic response is that the SLD cannot be changed. In addition, the current version, as well as all of the past versions of the SLD, have been reviewed and approved by the Attorney General's Office and any revision of significance must be reviewed by that Office.
  • Considering that the issue concerns the Standard Language Document, it should be reviewed by the Department and a Department-wide response formulated.

Scenario #3

Problem Solving and Technical Assistance

General Problem

It is discovered that a provider agency is using contract funds for purposes other then those stipulated in the contract. Is this permitted if the provider is not exceeding the reimbursable contract ceilings in any of its Department contracts? Does this have any impact on other Department contracts?

Specific Problem

A provider agency has been told that they will not receive any administrative costs for a specific DDD Group Home program. The contract administrator finds out that the provider agency has been receiving a rather large contract advance from DYFS and banking the advance in three (3) month CD's. The provider agency is then using some DYFS funding and the interest earned to fund the deficit in the DDD Group Home program. In the meantime, the provider is able to make his expenses by using the remaining funding from both contracts through an effective effort of co-mingling and "juggling" funding and delaying payments on legitimate expenses.

What should the contract administrator(s) do?

Recommended Solution to Scenario #3

Problem Solving and Technical Assistance

Recommended Solution

  • Meet with the other Departmental Component(s) and arrive at a mutually acceptable agreement to correct the situation (large advance and use of other Departmental funding to pay expenses).
  • Convene a meeting with the provider agency to discuss the decision reached by the Departmental Components to solve the problem. Follow up in writing to the provider agency regarding the issue, the agreed upon solution, and any other processes still to be carried out.
  • Discuss the Department’s Advance Payment Policy Circular. Is the Provider & Departmental Component in violation of the policy? Discuss what should be done.

Excerpts from DOP Job Specifications for Contract Administrator Series & Program Analysts/Coordinators